US Set To Import Record Canadian Oil Even If The Keystone XL Project Is Shelved

The new president of the United States has shelved the Keystone XL pipeline project on his first day at office but despite that the US has been able to position itself to pull in record imports of Canadian oil in the coming years via other pipelines which are currently being expanded.

The now shelved Keystone XL project brought an end to the prospect of a project that would have carried 830,000 barrels per day of heavy oil sands crude from Alberta to Nebraska.

While the move to scrap the Keystone XL project has been hauled by environmental activists and indigenous communities, there will be more than enough capacity to handle increasing volumes of crude out of Canada, which is the primary foreign supplier of oil to the United States, by the existing US-Canada pipelines according to traders and analysts.

According to the US Energy Department data, about 3.8 million bpd to the United States is exported by Canada currently.  It is expected that the volume of exported oil will increase to between 4.2 million and 4.4 million bpd during the next few years. According to Rystad Energy, more than 950,000 bpd of export capacity for Canadian producers before 2025 will be available because of the current expansions of the oil carrying pipelines.

Currently there is enough capacity for exporting more than 4 million bpd to the United States, according to Canada’s Energy Regulator.

The new administration under the US president Joe Biden is targeting to move towards de-carbonization and reducing reliance of the country on oil and gas and significantly reducing the emission of harmful pollutants. Fossil fuel is still the major source of the country’s energy.

“Whatever limited benefit that Keystone was projected to provide now has to be obviously reconsidered with the economy of today,” said Gina McCarthy, Biden’s leading domestic climate policy coordinator at the White House.

More than half of the oil imported into the United States is sourced from Canada even without Keystone. Expansion work of several of the pipelines that carry that crude are currently being undertaken.

The capacity of Enbridge Inc is set to be doubled by the replacement of its Line 3 and after the replacement the pipeline will be able to carry about 760,000 bpd of crude from Alberta to Superior, Wisconsin, by the end of this year.

The state-owned Trans Mountain line is also being expanded by Canada’s government to add between 590,000 bpd to 890,000 bpd to its carrying capacity. That line terminates at the Port of Vancouver, where it should be able to deliver barrels via tankers to the United States.

“We will be over-piped assuming the other pipelines go ahead on schedule,” said Wood Mackenzie research director Mark Oberstoetter. “If you add them all up, you can make the argument KXL was not needed.”

Despite being the fourth largest crude producer of the world, it has been years that Canada has been struggling with the problem of congestion of its pipelines carrying its oil.  

(Adapted from

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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